Our Energy Future

After the Copenhagen Climate Council was considered a failure, how should we prepare for COP-16 in Mexico? Big Think's live roundtable on March 26, 2010 in Houston was moderated by Tom Stewart, Chief Marketing and Knowledge Officer at Booz & Co. On the panel: Peter Voser, CEO of Royal Dutch Shell; Vinod Khosla, founding CEO of Sun Microsystems; and Marc Stuart, Co-Founder of EcoSecurities.

Transcript

Over a year ago

TRANSCRIPT

Tom Stewart:Good afternoon and
welcome to The Road to Mexico, a Big Think forum sponsored by Shell Oil
Company.I’m Tom Stewart; I’m the
Chief marketing and Knowledge Officer of Booz And Company, the global
consultant firm.My job today, my
role today is to moderate a discussion about Earth’s future.About the paths we might take toward
global action on climate change.

With
me in this room are three distinguished and brilliant panelists whom we’ll hear
from in a few minutes. Marc Stuart, the Founder of EcoSecurities, Vinod Khosla of Khosla Ventures, and
Peter Voser, who is the Global CEO of Shell Oil Company.

Before
we do that, and before we turn to them, first I’d like to welcome the audience,
not only the audience in this room in Houston, Texas, but also a more global
audience several hundred thousand strong across the world wide web thanks to
Big Think and Free Hurst Newspapers, The Houston Chronicle, San Francisco
Chronicle, and SeattleIntelligencer.com.

We’re
here to talk about climate, energy, and the future of our planet.We’re in Houston because in Houston,
also this week is Shell’s Eco-Marathon Americas.Shell has been sponsoring its eco-marathon for many, many
years with events in three continents in North America and in Europe and in
Asia.The centerpiece of the Eco-Marathon is a contest in which student built, energy efficient vehicles
compete to travel the furthest using the least amount of energy.Alongside the eco-marathon, we’ve been
holding a series of discussions, this is the third, presented by Big Think and
sponsored by Shell on the topic of our energy future.

Eco-Marathon
is this really, totally cool event.I was able to go over this morning and take a look at some of the
vehicles that are produced by the students; they are college students and high
school students; it sort of like a Soap Box Derby for nerds.For young people interested in innovation,
energy and transportation, the Shell Eco-Marathon offers a rare hands on
opportunity to stretch the boundaries of fuel efficiency using real life
experiences in technology and this, for the first time, is going to be an event
where the Eco-Marathon Americas is actually held in an urban setting on city
streets with the streets going right around this venue tomorrow afternoon.So in effect, you’ll be able to get
highway mileage from previous events and city mileage from these sort of
extraordinarily interesting cars through tomorrow.So, it’s a really neat event and will be followed by events
in Germany and Malaysia later on in the year.

But
there is another race going on.It’s a race involving the world’s energy needs and the world’s growing
appetite for energy, and the Earth’s carbon carrying capacity.And it’s that race that makes the Eco-Marathon important and it makes this event important.

Last
night, a group met here to discuss what U.S. policy might be and what changes
in U.S. policy might be made to try to get U.S. policy working for a greener
and more efficient energy future.We talked a lot about the importance of putting a price on carbon, about
the need to align incentives so that large corporations, entrepreneurial
corporations, and individuals in their own behavior all find the opportunity to
direct their energy toward the future we all know that we need.

Today,
we’re going to look more globally.For nearly two decades, since the Earth Day Summit in Rio De Janeiro in
1992, governments, companies, academics, and non-governmental organizations
have been working to develop a framework for policy and action to prevent or
mitigate climate change without inhibiting economic growth and
development.The issues aren’t
easy, as all of you know.The
science is complex; the scale of the problem is complex.I mean, even in the midst of a very
rapid technological change, the sheer size of the world’s energy infrastructure
means that rapid change still takes a long time to develop and to diffuse.And the politics of the problem; if the
economics and the technology of the problem are complex, the politics of the
problem, as many of you know in this room, are even more complex.

The
world leaders who went to Copenhagen in December hoping for a new climate
treaty came away with less than a lot of people thought they were going to get,
and a lot of people hoped for.A
lot of excitement around climate change seems to have dissipated.In Europe, the price of carbon
fell.But the issue did not go away.Carbon is still poison to the
atmosphere, and while there have been questions about the accuracy of some
climate change data, the evidence for impact continues to grow.

The
leaders who met in Copenhagen are going to be meeting again in Mexico, in
Cancun later on this year.It’s
called the 16th COP, COP 16; the 16th conference of the
parties of that original Rio agreement of 1992.

What
we need to do and what I want to do this afternoon, is try to take a look at
the road to Mexico.The road from
here to then, from now to then, and ask the question of our panelists and
invite you also to join in the conversation about what we can do to get
momentum going again.Let me
quickly introduce the people who are seated beside me.

On
my right, on your left as you are looking is Peter Voser, the Chief Executive
Officer of Shell Oil Company; it’s a post he’s held since last July.Previously, he was the Chief Financial
Officer and the Executive Director of Royal Dutch Shell, and Peter has taken on
himself as the head of one of the world’s great energy companies to imagine
what the energy company of the future will be and to make Shell become that
company.

Next
to him, Vinod Khosla is an
Entrepreneur, Investor, and Tech Visionary.He is, as he was saying earlier, a man who bets big on
radical technologies.That’s his
business model.His venture firm,
Khosla Ventures, is one of the leading investors in clean energy
technologies.He is also the
Founding CEO of Sun Micro Systems.So, in a sense he’s gone from sun to solar in his career.And his venture capital career helped
found Juniper Networks, Excite, Serent, and many other successful
companies.

Marc
Stuart, no relation, he spells it incorrectly, is the Co-founder of Eco
Securities, a globally leading developer of greenhouse gas reduction products
and projects, carbon offsets, emission trading mechanisms, and the like.He is an expert on markets for carbon
and also is on the board of the International Emissions Trading
Associations.Last year he was
named one of 30 green heroes by CNBC European Business Magazine.So, it’s a particularly terrific panel
able to bring a lot of perspectives to this topic.

And
Peter, if I may, I’d like to begin with you and to essentially ask the question
that I think many people in the audience and around the world are asking, which
is; what do we do to get progress going again globally in carbon and to try to
sort of get out of this sense that we have reached a pause and get forward
motion started again?In particular,
what can big companies like Shell do in support of that process?

Peter
Voser:
Yeah, thanks for the question.Let
me go back to the way I see Copenhagen.I think Copenhagen was pushed up tremendously and the expectations were
very high as you actually described it.For me, Copenhagen was just one milestone in a long journey and I think
that’s the way I would also take Mexico. We will have to move towards global
understanding, hopefully global agreements on how we move forward from a public
point of view, from a corporate point of view, from another stockholder’s point
of view.So, I think we should not
make the same mistake again and actually expect too much.

So
for me, there is on the one side, a public debateon how we actually take this forward, what we want out of
Mexico, and actually how we would like to structureglobal, regional, or industry frameworks in order to allow
us actually to have a long-term program price, which is really essential for us
so that we actually can invest and we can go forward as a global company, like
Shell because at the end, we have to run an energy business which provides
energy today, tomorrow, in five years, but also in 30 years.So we cannot just stop tomorrow
providing that and we need to combine the efforts of the scientific on the
technology side with going forward and producing more low carbon fuels, using
more gas which is more enhanced with better NCO2 content compared to coal, for
example, etc., etc.So, that’s the
one side.

The
other side for me as a CEO is, let’s move on.Let’s actually do what we can do today.Let’s not wait until we have good
regulations and frameworks which actually allow us to invest.There’s a lot we can do in energy
efficiency within our own operations.There’s a lot we can do and eco-marathon is a brilliant example of how
to move on the transport side to a lower carbon fuel world.Biofuels come to mind and other things
come to mind.We are pushing gas
and we are pushing gas and we are advocating that, not just in the United
States, I was just in China over the weekend and we had a huge and long debate
and discussion about gas in China.How can that help actually to help their climate change goals, etc?

And
then the other one which we are pushing as well, is carbon capture storage and
transportation, and how we can actually move that forward.We need to have it as a mitigation in
technology to actually give the industry and all the stakeholders a push
there.So I think that’s all the
elements we are working on in Shell apart from actually pushing our advocacy
into the Copenhagen/Mexico process in order to actually get the world to move
on to some global frameworks.

Tom Stewart:Let me push you a
little bit on what you were saying on the second comment, that it’s time to –
while we continue talking and building framework, it is also time to stop
talking and start doing stuff.What are some of the things that can be done with major energy companies
to sort of put stretch targets on that good intention?To sort of say, all right, don’t just –
how ambitious can you be in just starting to do stuff while awaiting for the
policies and how can we increase this and sort of raise the heat on it?

Peter Voser: I think you can be quite
aggressive in this, but if you have stretch targets which we, from
time-to-time, get from the political side, which are not just achievable, I
think you are actually missing the boat here.You are missing the point.I think you need to give incentives in order to achieve bit
and significant steps forward rather than actually putting a target in place
which cannot be achieved.

I’ll
give you an example.A few years
ago we got biofuels regulations in Europe, which is not possible to be
achieved.Now, they have to change
after two years.I think we need
communication between the corporates, the technical side, the science side, and
the regulators to governments in order to come up with the right target.I think industry, when challenged,
normally delivers.We have good
examples here on how you can drive technology and innovation.Shell has always been first in terms of
technology and innovation.We
don’t need to stretch target into goals, we will move.But you cannot expect that you have a
light switch, light switch from this energy source to this one, overnight.It will just not happen.

Tom Stewart:Vinod, let me ask you,
you’re in the business, among other things, of radical disruption.You’ve been quoted as saying, last week
I think, that coal could actually become the cleaner fuel than solar.And you said earlier today that the
biggest thing that you think we need to do is to have economic gravity.Economic gravity always prevails and
how can we start to get that gravitational pull to strengthen.So, how can we get that gravitational
pull to strengthen so the people start moving?

Vinod Khosla: Thanks Peter.I’m a big believer that in the end,
economic gravity always rules.And
that environmentalists, by at large, trying to convert the rest of the world
into environmentalists are going the wrong way.We need to take environmentalists and turn them into what I
call “pragmentalists”.That
understand the role of economics, economic gravity in large social adoption of
new energy sources, technologies, everything else.

Having
said that, I actually believe all the people, all the gurus, the experts, and
we can talk about expert forecasts, they are probably almost always wrong and
random.We can come back to that;
there is statistical data to support it.

Peter Voser: I don’t need them, I
believe you.

Vinod Khosla: But those of you who are
interested read a book called, “Expert
Political Judgment,”by Professor Tetlock, a 20-year study
of 80,000 forecasts; a very rigorous study.But we start believing these 20, 30, and 50 year forecasts
from experts.We need to abandon
them and instead of exporting the past into these future forecasts, we need to
invent that future.We will along
with that future, I am on record saying, I can’t imagine oil being more than
$30 a barrel by 2030.And the
reason is very simple, it will have to compete it’s way down to compete with biofuels
and cost of production of biofuels is the marginal cost of rent on land, and if
you look at fundamental economics, that’s the number it will drive to in real
terms, real dollars.There is no
question in my mind that we will have technologies that meet unsubsidized
market comparativeness against fossil fuels that are 100 percent renewable.Maybe better than 100 percent,
which is where my comment where coal can in fact be cleaner than solar.That’s based on the technology we feel
is waiting for commercialization that reduces the lifecycle of carbon
production of power generation from coal to more than 100 percent.So, solar can only do 100 percent reduction in
carbon emissions, this technology, by displacing products that could otherwise
produce carbon can get up to 200 percent reduction.

I’ll
be happy to go into it in more detail, but the main point is this.We have to bet on innovation and
technology.And technology that’s
radical and different and get our best talent working on this technology.And I would submit that five years ago,
there wasn’t a PhD student at MIT or Cal Tech, or Stanford, at least that I
knew of, that was interested in working on energy recent.All the best minds went to
biotechnology, nanotechnology, computer science, semi-conductor devices, not in
energy research.And that has
changed, and that’s why the future will be different and why innovation will
reach this point of unsubsidized market competitiveness.Because of that, I use my favorite
phrase, these technologies will meet Chindia price; the price at which India
and China will adapt them without regulation.I believe we are far closer to that point than anybody
realizes.

Question:Bureaucratic
survival.Never put a date in the
same sentence.So, you’re not a
bureaucrat, so I’m going to ask you to break that rule.You said these technologies will meet
the Chindia price, when?

Vinod Khosla: So, I believe carbon
sequestration today for many carbon point emitters, many coal plants.I’m not saying most, I’m not saying
all.Many coal sources can be
carbon negative, or carbon zero, in the next year or two without a price on
carbon because they turn carbon dioxide in this case into useful building
products that can be sold.And so
carbon become, not a problem, but a feed stock.In the case of oil, I would say the same thing.I believe in the next year or so,
renewable oil sources can compete unsubsidized with crude oil.I also believe –

Tom Stewart: The biofuels and things
like that –

Vinod Khosla: Biofuels, right.I also believe on the consumption side
of this, unlike and I wrote a blog that got me in a lot of trouble where I
wrote a blog about two years ago, which said, “Prius is more green wash than
green.”And it is more green wash
than green.It is a completely
uneconomic technology and in the McKenzie study came out, hybridization of
cause came out as the single most expensive way to reduce carbon in dollars of
costs per ton of carbon reduced.I
believe it was about $100 per ton.And so we are picking technologies because the environmentalists love
them, that is pleasing to the political appetite and certain political
communities, and that’s the wrong way to go.

On
the efficiency side. We’re working on engines that can have 50% more efficiency
without an increase in costs of internal combustion engines.And I believe those are near commercial
today.It’s pretty easy to do a
light bulb.LED light bulb, and we
will be introducing that within the next year, that’s cheap enough, that means
below $10, where it pays for itself within the first 12 months.

Tom Stewart:You’re saying it’s
across three of the four technologies you actually said within the next year or
18 months, we reach a tipping point, and the fourth you didn’t –

Vinod Khosla: I would say all four will
be commercial next year at retail, and I’ll add a fifth which is a major energy
consumer, I think air conditioning that is cheaper than today’s air
conditioning and 75 percent less energy consumption.That’s most of the consumption, lighting, HVAC, transportation
fuels.

Tom Stewart:One of the things that
happened in Kyoto was, some people felt that this 18 year string that started
with Rio, with the Earth Day Summit in Rio, that we sort of played out the
string.And what came out of Kyoto
was what was called a basic agreement, which was with the United States, India,
China, Brazil, and South Africa, right.And those five sort of separated themselves and said, “Let’s us
talk.Let’s take this offline and
we’ll talk.”And Marc, the
question I wanted to ask you, and then I want to get to the market mechanisms
that seem to be somewhere between the future and actually achieving it, but the
question I want to ask you is; does the UN framework still have life in
it?Should we actually just say,
that was then, this is now, has it outlived its usefulness, or do we need to
keep it going, or should it be jettisoned and revitalized, I guess that’s the –

Marc Stuart: The process that began in
Rio and ended in Copenhagen is over.Okay, the top down UN-driven, caps on countries I do not think is going
to be revived.I think what you
are going to see, and I think what the basic agreement points us in the
direction to, is a much more heterogeneous policy environment the countries are
going to take on with different types of caps, wit intensity caps, with
agreements on land use, with efficiency targets, with some with hard caps, etc.
and with more types of collaboration there will be more bilaterally and
multilateral.You can obviously
see the U.S. and Mexico, for example coming in with some type of deal to merge
their carbon commitment going forward.Or, the U.S. and Chile, for example, is one that has been mooted, or the
Europe and Brazil, and obviously the big one is the U.S. and China.And that is something that embeds many
more things than just simply climate and environmental concerns.

I
think that what Copenhagen showed is that impart, the climate issue has
actually outgrown the U.N.This is
now the big boys playing.This is
around big issues; this is national leaders, the executive branch talking to
each other on this.That never
happened before and that is a very substantial move.And as such, the U.N. frankly, does not rate above those
people and that is something you need. Where does the U.N. go from here?Clearly, Copenhagen was a
disaster.It was a disaster both
in terms of its overall – okay, well disaster is slightly strong.It was a disaster in terms of its
overall outputs of what was expected and what came out, and it was not helped
by the fact that it was basically a logistical nightmare.And that put a lot of pressure onto people
and there was no real possibility to actually get people to work on these
things.And that was ultimately
the problem.

Where
do we go from here?The U.N. has
to reestablish its credibility as a neutral arbiter, as a more of a technical
agency between countries rather than just simply, as I say a top down, we shall
do these things collectively.It
needs to look at – if we’re going to have different types of commitments, how
are we going to adjust those against each other.How is one commitment going to look against another?How do you create some form of common
currency, some sort of comparativeness to understand how things are working
between each other?Ultimately, we
do need markets.Okay?Markets have to be part of the
solution.I disagree a little bit,
I think that policy by definition shapes markets and puts them in place, and
you have to have that for this transitional phase.We have an enormous amount of capital stock out there that
will require change over.Not
every single power plant is going to be able to put a something on the back end
of it that will enable it to produce viable materials for the building
stock.We do need ways of keeping
what Kyoto showed us that markets and innovation sprout up everywhere as part
of this process.

Tom Stewart:So, what we need, and
what I think I hear you saying, and Peter I want to ask you to comment on this,
is that we may be coming up with a heterogeneous patchwork of agreements among
nations, a patchwork of policies, and that unless we have some sort of very
clear price signal that is so you have apples to apples to apples despite this
patchwork.I mean, the problem
with the patchwork is that you could get a race to the bottom, right?I can find, oh here’s a loophole
through which I can dive.And what
we’re trying to create is a race to the top.We’re trying to create the incentive so that you get a race
to the top.And Peter, as you look
at this future, first of all, do you think that is right?That we’re going to have this collection
of bilateral, multilateral agreements?And will that give corporations like Shell and you know, other large
corporations the consistent global view that allows the race to the top, or do
we run the risk of a race to the bottom?

Peter Voser: First of all, at Shell we
have always said we want market solutions because that’s in the longer term
what we will think will give us the incentives to actually invest at the lowest
cost possible in order to actually bring Co2 down to acceptable levels.We have also said we cannot be a purist
on this one that everything works tomorrow; it will just not happen that.We are having 45,000 people in
Copenhagen trying to sort something out; it will never work this way.So, I think I’m a more pragmatic and say we may start off with bilateral, multilateral, etc. in order to get
actually going.And I think we can
handle that, but I think in the longer term, if the market really will function
and it needs to function, I think you will go towards a more globalized market
environment.Now, you can ask me
the same questions, is it one year is it five years or 10 years?Do I care?Most probably I’m in the camp of I don’t care that much at
this stage, I want to get started to move.

So
I think, this – what we have said, I’m not entirely sure that everything works
in one year, but we can come back to this a little bit later.So therefore, market-based overall I
think you will have different countries doing it and regions doing it
differently at the beginning.I
also think we need, apart from the U.N. paralysis; we need also the industries
to start to work together.You
need, actually, the coal industry to come together.How do you measure actually, on a worldwide basis, what is
best practice?How do you want to
drive that?And I’ve got head of
refineries here; we need the refinery industry to come up with stuff.We have benchmarks.I think we need to actually – and
that’s what I meant, we cannot wait until we have a global framework, we need
to take the initiatives.And
industries have always do work best if they have, as an industry to have a
challenge.And we are normally
quite good at getting to the lowest cost solution.So I’m still convinced that we’ll go on the race to the top,
but I think it will be a kind of volatile bumpy road.

Tom Stewart:And one of the
questions I have, and this is actually one of the things that happens in the
eco-marathon is that there is a certain minimum speed that – if I could go in
these wonderful vehicles – If I could go at zero speed, at the slowest possible
ambling rate, my miles per hour could be very good with a lot of technology, so
I think there’s a minimum average speed of I think 15 mph, or something like
this, so that there is something that puts a little pressure on the student
engineers of these cars.But I’d
like to take the issues here that Peter raised and add something that Marvin
Odum, who is the President of Shell Oil company said, which is that in his data
show that in the energy field where you have these large interconnected
systems, it takes almost a quarter of a century for a new energy technology to
develop to the point where it can take one percent of the market.And I think that we would all agree
that that’s too slow.And first of
all, you could challenge him on the data, I’m not sure he’s here to engage the
battle, but first of all I don’t know if the data are right, but let’s assume
that; how do we speed that up?How
do was get that clock speed a lot faster?

Peter Voser: So, I just want to clarify
a few things quickly.Mark, I
didn’t say that policy and politics are not important, in fact, they may be the
most important thing that enables or disables it and though I believe the
technologies will be here and proven technologies next year or so, deploying
them will take 25 years, broadly.So, there’s a big difference in enabling technology that is proven that
you can get an engineering report that says this works, to deploying it
broadly.And there’s a deployment
cycle.In fact, the deployment cycle
very much depends on politics and policy. And so we should be clear about
that.

This
issue of change and how fast it happens I think is a complete red herring
because it’s tied to this issue of economic gravity.If people can make money at it, and I hear these forecasts;
it takes tens of billions, or hundreds of billions of dollars to change the
refinery infrastructure and you see these extrapolations.Let me give you a concrete example.In 1996 I had a similar conversation, I
was known as a telecom investor with the CEO.Every major telecom company in the United States, and I was
told nothing had changed in 50 years.And nothing had changed.And I was on the board of one of these and in fact, you couldn’t even
introduce a new piece of equipment into the network without going through the
unions because there were union rules of how many pieces of equipment a
technician could support.So,
about as regulated, and if you think the oil industry sensed it, if you changed
the long distance call rate by a penny, the Governor is going to call you,
right?Every politician got
involved with a 2% change in your phone rates.This was 1996.Not only that, I talked to the largest suppliers of equipment, people
like Cisco and Lucent, and they said to me, based on the input that their
customers were giving them, not one of them was ever going to internet
technologies for the core of the telecommunications network.Not one was ever going to go.In fact, the Cisco CTO Chief Technology
Officer told me they never would go above what’s called a technical term, OC12,
a certain data rate.Very low data
rate, with internet technologies.Everything else would match the telecom infrastructure.And it was the worst infrastructure
than energy because you had to be compatible with the foreign exchange
installed in Iowa 50 years ago.And those were still operational.

Within
three to five years, Wall Street, because of new economics, was pouring
hundreds of billions of dollars, no federal money, voluntary commitment to this
new industry, laying fiber, hard construction problem, it’s a horrendous rights
of way problem when you’re going across everybody’s property to lay a cable,
legal nightmares.Hundreds of
billions invested and five years after that conversation I had, not one carrier
would say they weren’t completely switching to internet protocols.That same kind of black swan phenomena
will happen in the energy business when the technology is proved economics.And the people who don’t adopt them
will go out of business.

Tom Stewart:It’s like arm
wrestling.You know, we can be at
a stasis for a long time and then when you win, suddenly –

Peter Voser: Suddenly you go the way –
Let me give you a stunning example.All right.AT&T was a
top ten company in the world in 1996, five to seven years later, they for sold
for a song to Cingular.People
forgot the small cellular start up that didn’t exist 10 years before.Bought AT&T and uses that
bank.AT&T disappeared.So, radical change can happen, it
happens regularly.In fact, I
could give you 20 examples of such large change.And there’s some great graphs from analysts from Morgan
Stanley to your specific question of how fast the rate of change is
happening.There’s a chart that
shows that 50 years ago, it would take 50 years to get to one percent of
society to adapting a new technology like radio.And then television, it was 30 years.Today, for a new technology, like Google,
it’s three to five years to get 50% of the population to adopt it.There’s some stunning data on it.I think we are in this accelerated
phase.

Tom Stewart:And you think we’re
going to be in that phase with the energy technologies as we were with the
communications?

Peter Voser: If it is economically
driven.

Tom Stewart:And that’s where I
want to come to Mark for a second.Before that, I actually want to tell the story years ago when I was at
Fortune I did a story about some of the early internet entrepreneurs.And a woman named Stacy Horn, who
started an online service back when it was dial up in New York.And she was using up all of the phone
lines to get to run her banks of modems in her third floor Greenwich Village
apartment.And so what was then
Bell Atlantic needed to run new lines from the intersection, where the trunk
line was and that meant, New York being New York that the Bell Atlantic
technologists had to go from one basement to another because that’s where the
lines run through a bunch of brownstones.And they were going crazy because they couldn’t identify the owners of
the buildings because the owners of the buildings were corporations within
corporations, within corporations in the Cayman Islands and da, da, da, da,
da.And so no landlord would come
forth to admit that they could actually let the Verizon guy in until Stacy,
with an entrepreneurial spirit said to the Bell Atlantic guy, well in that case
they’re not going to complain if you come, will they.And the guy shrugged and said, you know, you’re right.And so they just went right through and
the heck with the regulations drove the lines, and of course, modems are a
thing of the past, but that’s the kind of change in attitude that can
happen.

But
Marc, this doesn’t happen without market mechanisms that give that strong
signal that drive the investment from Wall Street, or wherever it was, and the
current market mechanisms for carbon trading, the Kyoto mechanisms, are going
to expire in 2012, which you know, is two years from now.So, what happens?What happens to give the kind of market
that we need to have economic gravity start playing this role?

Marc Stuart: It’s a really good
question, Tom.First of all, I’d
just like to make a little comment on the new technology versus old technology
paradigm that we were just discussing.My point would be that, yes, we’ve seen tremendous acceleration in
introducing new technologies, but they’ve all generally been into open
space.Into things that were not
already there, already providing the services.My electricity works perfectly well in my house.My light bulbs work well.My car works well.And displacing an existing service
mechanism with a new one, I would tend to think needs that policy driver to
make it a little more cost efficient because there’s inertia in the system, as
we heard from Shell. And that is
my only point.I agree with
you.And one of the problems with
the current carbon trading system under Kyoto is that it lasted only five
years.We only got five years of
value out of the CDM and we were only able to start doing things, really in
about 2004, 2005 when we realized there was going to be a market.

I
would argue that there was perhaps one technology development that was driven
by the CDM, one.Which was the
incineration of HFC’s, which was not necessarily –

Tom Stewart:Hydrocarbon –

Marc Stuart: HFC of refrigerants.[00:37:59.09]

Tom Stewart:Refrigerants, right
right.The ozone, the ozone -

Marc Stuart: That would be the only
technology I think was driven by the credit based market based system of the
CDM.If you give me a 20 or 30
year value stream for the environmental values that are created by beating a
benchmark, and Peter was talking about benchmarks before, I am a fervent
believer that we should be benchmarking every technology in the current, what
they call additionally system within the CDM must be tossed away forever.Benchmarks and long-term capability to
earn would make an enormous difference to accelerating in that capital stock
changeover.Instead of it taking
25 years, maybe we can get that down to 15 years, or instead of one area taking
40 years, taking 20 years.This is
the kind of thing – we don’t have that right now.And right now, as I say, we’ve developed a global
infrastructure that is in place to seek out emission reductions throughout the
global economy.It has been halting;
it has been imperfect, okay.But
it has developed, as I say, an entire culture that is out there looking for
these ways for reducing, and as I say you have the thousands of PhD’s doing the
big science, I have the folks on the ground that are looking for ways of
putting things on the ground.And
Peter obviously has the same sorts of folks that are looking for things.You need both sides of it.Without having a market that gives you
that kind of long-term stability, and Kyoto desperately failed in that, you’re
not going to see the kind of interface between technology development to
execution platforms throughout the world that is necessary.

Tom Stewart:What are the
differences between carbon and energy technologies and internet technologies is
speed.Right?I mean, you can get three guys in
a garage and give them 50 bucks and -

Vinod Khosla: I’m sorry; I have to
disagree that telecommunications infrastructure –

Tom Stewart:That’s different, I
agree.

Vinod Khosla: That changed in five
years.Do you know the minimum if
you designed a new piece of equipment that was two years of testing in the Bell
core network, before you can even introduce a piece of gear into the telecommunications
network, it was so mission critical I would submit, more mission critical than
most of energy that the rigor around changing it was stupendous until companies
started going out of business because they didn’t have economics.And then suddenly all that
changed.So, I just have to sort
of disagree with that and disagree with sort of this notion that carbon pricing
is as critical as people make it out to be.

Tom Stewart:Peter, you were sort
of nodding in agreement with Mark as he was talking.As you think of the importance, I guess of long-term market
signals, to the decision you are making every day at Shell, what do you need in
a pricing mechanism or in a policy mechanism that gives you the ability to make
those decisions in the right way?And
how do we get there from a – well I’ll follow up with how do we get there from
where we are now?

Peter Voser: Look, I don’t think you
will every get certainty.In any
business which invests for 30-40 years, we have got a lot of uncertainty,
you’re starting with price uncertainties, technology uncertainties, government
uncertainties because we have been nationalized and denationalized a few times
in many places.So, I think what
I’m looking for is at a framework going forward and the mechanism in which I
can build trust over time.And
that, I think a not far away.The
two gentlemen are not to far away either.I think we are all going off the market mechanisms at the end, you call
it economical gravity, etc.What
we are looking for is actually an incentive to invest in order to – well that’s
what we are looking for.And I
think that will have boundaries in the longer term and these boundaries are
firmer at a certain stage than they are at some other stages.So, I think we can achieve that and I
think we are not that far apart.I
think what I still struggle with some of the discussion actually, is I hear
telecom and I hear other things, but I think the vast amount of investments, we
need to cover the energy gross across the board mainly in emerging markets will
not be delivered by the breakthrough technology in the next five years because
they are not scalable in this time.So, I think we need also, an investment environment to actually invest
in those areas, and I’m fully optimistic when I see China and India how they’re
pushing the renewables part, they will make big steps.They will not need 25 years, I do
agree, but the rest of the world may actually need those 25 years. But it’s
also, how are we going to invest and finance between now and 2030 and
2040?So, we will have on the one
side a job to do quite clearly, and we will have to keep the gross on the
control because energy, and I use this sentence quite a bit; energy powers your
life, and it sustains your life.And we cannot afford to tell those who don’t have the energy intensity
as we have it today in the U.S. or in Europe to tell them you have to wait 30
years.So, let’s just also bring
some realism in here.We need both
and we need vast amounts of money.

Tom Stewart:And this sort of cuts
in two directions.In the next 30
years, I think, a third of a billion people in India and a third of a billion
people in China, and if I can do this math, that’s two-thirds of a billion
people will be moving into cities.And city life tends to be more energy intensive than rural life and
certain rural village life, which is what many of them are coming from.So they are going to be moving into
urban environments and consuming more energy than they used to.We’ve also done some data, just the
week that General Motors declared bankruptcy, we published a white paper called
“The Best Years of the Automobile Industry are Ahead of it,” because we were
actually taking a global perspective and looking at the fact that as you look
at the development of India, China, Turkey, Mexico and a great many, Brazil, a
great many other countries, a lot of them are passing that moment of GDP per
capita, when suddenly they buy cars.And that’s happening in China right now with, you know, 25% growth in
the automobile market every year and I think that compounds at a – that means
in three years, you double it.

So,
you have this extraordinary growth in opportunity for people, but also this
extraordinary growth in demand for energy.And this is, I think one of the reasons that Copenhagen
foundered, this sort of battle between the energy have’s, or the economic
have’s and the economic have not’s saying, hey we can’t.How can we get that conversation to
change from a stand off, which it really is right now, it is sort of two bulls
in gates like this and nobody’s moving?How can we get that conversation to start moving to find a, hopefully, a
win-win in there?Vinod, do you
want to take a stab, I mean I’m up here; I don’t know why I’m up here.

Vinod Khosla: Sure, I’ll pick up from
where Peter left because Peter made a very important point that I think is
often misunderstood.People need
energy to power their lives.And I
like to say, there are 500 million people on this planet that enjoy an energy
rich life.We will lead five
billion, maybe nine billion people by 2050 to have an energy rich life.We won’t get there to energy savings or
efficiency.So, the fact is, the
world will need, two to 10 times more energy here in the foreseeable
future.The carbon cap and trade
Kyoto protocol was deeply flawed in one very important way.It said, here’s a cap on carbon, and it
didn’t differentiate between economies like India and China that wanted to grow
10% per year, and economies like Japan were growing less than 1% a year.You can’t have a cap independent of the
economic growth rate.You can’t
have a cap independent of whether the per capita income is $1,000 a year, or
$35,000, what you can have, and I wrote a paper on this, it’s on my website, www.Khoslaventures.com
called, The Terms of Discussion Around Carbon Cap are Deeply Flawed.There should be discussions about
the carbon efficiency of GDP, rates of growth for every economy in the
world.And that is the only basis
that can be morally described as fair.Grow at any rate, but subscribe to a global standard of carbon
efficiency per dollar of GDP.That
is a fundamental flaw in Kyoto and I was very glad to see that the Indian Prime
Minister at this discussion and I tried to influence him quite a bit last year.He took that position at Copenhagen and
I’m very glad he did because it changed the discussion.It was the only substantial new
position that was taken which was carbon efficiency matters and they discussed
it with their Chinese counterparts and China was in a similar –

So,
having said that, I want to also make another point.This is not as pessimistic an environment as people
think.Copenhagen to me succeeded
in a very big way that people don’t realize.There was no treaty, there was no cap, but there isn’t a
CEO, yourself included, who would make an investment today in infrastructure
without considering carbon as a risk.So, I was just talking to this young man who runs a $75 billion
investment fund.You don’t deploy
$75 billion without deploying it in infrastructure.And he said to me, “I can’t find any infrastructure investments
that are low carbon risk.”Think
about it.If you’re trying to
invest, you can protect it against terrorism, you can protect again nuclear
attacks, you can protect against floods, but you can’t protect against carbon
risk.And so they don’t make
investments, they’re frozen.In
fact, that’s exactly why 150 coal plants, previously approved have been
cancelled in this country.Why?Because it’s a carbon
risk.So, I actually believe
things like Copenhagen and Kyoto have brought that risk to such a big level of
visibility that it is a part of all corporate decision-making and 80 percent of
the benefit of carbon pricing is already done.In fact, I’m certain it actually adds to the risk and has
people consider carbon.

Tom Stewart:But in order then to
take that risk, or not take that risk, you have to be able roughly to quantify
it and that’s where we have a problem, Peter.At this point, the band of variability around that risk is
simply, I think it needs to get a little narrower.

Peter
Voser:
Yeah, I know.I think we can deal the pricing because that’s the same as oil and gas, you need
to have your views.Well, what we
need to know are actually – it’s more the rules.It’s the legislations around it.Now, if that is, as you talked earlier, the country,
regional, or global based, I think it will evolve.

Tom Stewart:So, the risk is less
economic than it is political, but the game might change in a dramatic way and
–

Peter Voser: But for us, we are good
at quantifying.I mean, you bring
a very important point, but Shell has now, for more than a decade already, we
have our carbon price assumption.And when we look at projects, we look at the carbon intensity, we price,
we look – we build that into our economics.So, this is not new for us and that’s why I called my
Copenhagen, it’s a milestone in a journey but a very important one because we
are talking about it now.

Tom Stewart:Marc, I think that
there is one question about – factual question about Copenhagen that I’d like;
I mean about Kyoto, that I’d like you to address.As I understand it, and I may be wrong here, so you can
correct me here.The Kyoto accord
actually exempted the emerging markets from caps, but the fundamental idea was
that when we come back to; we’ll bring you back into that same framework, is
that the way we square the circle of disagreement?

Marc Stuart: Exactly.

Vinod Khosla: There are Tier One
countries and Tier Two countries.

Marc Stuart: Exactly.And then nobody in Copenhagen thought
that China, which had one-third the emissions of the United States in Kyoto
would be more than the U.S. afterwards.And I completely agree with Vinod.I think we need to move to an intensity basis, at that point even to a
capita basis after that, but the idea that benchmarking industries across that
is extraordinarily synergistic with that.And I think that all of these pieces do eventually come together, but
it’s a very complex negotiating to get to that point.

Tom Stewart: Quickly, what do you mean
benchmarking across industries?So, we have a carbon intensity metric that we share across economies, do
we also do the same thing sectorally, so we have a carbon intensity comparison
between Shell, BP, Exxon-Mobile, or between Coal, gas – so we have a whole
horizontal and vertical layers in climate –

Peter Voser: Let’s take refineries, if
you do refineries on a worldwide basis, you automatically come and you look at
the carbons behind, etc. etc.That’s how we can –

Tom Stewart:How much transparency
are you prepared to give?

Peter Voser: That’s why I used the
refineries because you have actually a system already in place where the
transparency is there.And I think
you can drive this without having too much of a commercial sensitivity around
it.Some others you can’t, but I’m
pretty sure you can do a lot.I’m
not an expert, but you can do a lot on the upstream side as well when you have
oil production, etc., etc.

Tom Stewart:I think in general,
businesses tend to have a knee-jerk reflexive reaction against transparency
thinking that things will be competitive that turn out not to be, or turn out
to be less competitive than they thought, so we could probably have more
transparency than a lot of people might instinctively realize.

I’m
going to at this point, invite people in the audience, if you will, to ask
questions.And we have microphones
here.And if you will please get
in line behind the microphones and we’ll take our questions.I’m going to ask you to do two things,
please.Number one is to identify
your – three things.Number one is
to identify yourself, number two is if you have to ask a question of a specific
person, ask a question of the specific person or the panel generally, and
three, I’m going to exercise moderator’s privileges and I’m going to cut off
all speeches.Short questions,
short, to the point, and let’s try to keep the dialogue constructive and going
forward because that’s what we’ve been having so far.And please, I also want – the other thing I want to do that
we have, at this moment in line we do not have any women and I want to see
women in line.And I want to make
sure that we are getting a diversity of points of view here.

So,
sir, why don’t we start with you.

Laverne
Williams: Yes.I’m Laverne
Williams, I’m the Founder and CEO of Environment Associates Architects
Consultants, we’ve been doing green architecture now for 35 years and we are
based right here in Houston. My
question is directed mostly to Mr. Khosla, but anybody else who wants to answer;
I’d like to hear your thoughts too.For the technologies that you are elating to, okay, will there be enough
basic resources available on the planet to eventually, for everyone to benefit
eventually?You know, we’re up to
nine billion people on this planet.Also, what about the costs of implementing these technologies, are the
Principles of Cradle-to-Cradle and the Precautionary Principles going to be
employed in their implementation?

Vinod Khosla: Yes and no.It’s hard to give a blanket answer, so
I will give you an example.For
every kind of coal mine produces roughly 2 ½ tons of carbon dioxide, which the
process I was talking about earlier turns into five tons of building materials
carbonates; calcium carbonate, magnesium carbonate, things like that.Not only that, to produce that five
tons of building materials would have taken seven tons of limestone mining for
aggregate for production, things like that.So, one ton of coal eliminates seven tons of mining.Okay?So, you multiply your resource.You’ve taken your waste, carbon dioxide, and embedded it
into something that produces five tons of building materials.By the way, the other piece we need
from that to make this happen, to combine with carbon dioxide is all the
geologic brines Peter keeps digging up.Every time you draw a barrel of oil, you’re pulling up five to seven
barrels, 15 barrels in some cases of brines.Those brines have the calcium hardness and some alkalinity
that we need to drive our process.So, I can remediate his brines with the power plant’s carbon emissions,
or the refineries carbon emissions, produce a building material that reduces
mining by 80 percent or more.Not
only that, because I’ve remediated his brines, and I don’t have any of the hard
stuff in it, no calcium in it, I can desalinate that at a fraction of the
energy cost it would have taken to desalinate that and fresh water is my
byproduct.That’s a creative
solution of this one example.

Now,
I can give you other examples that don’t give the Cradle-to-Cradle, but in fact
this is actually a stunningly attractive example where all of it works at zero
price of carbon.

Question:So, by
Cradle-to-Cradle to clarify, that simply means that we are looking at the whole
cycle of that carbon molecule from beginning to end.We’re not sort of throwing some of it out back –

Vinod Khosla: And the base products
from oil extraction and –

Question:It sounds like a case
of two wrongs making a right actually when you put those two things
together.

Vinod Khosla: It does.It’s quite true, that’s what people
tell me.

Question:Thank you very
much.Yes.

Rob
Stavins: Good afternoon, I’m Rob Stavins, Professor of Business and Government
at Harvard University.Thank you
for a wonderful discussion.I
agree with much of what’s said, although a few of the things that were said, I
found to be, I want to say this nicely, inconsistent with the facts, as I know
of them.Having said that. And I believe something upon which you
agree is that eventually anything that will happen with climate change will
happen through markets.And I
think there was also some agreement, not complete agreement, I guess, that that
will require price signals being implemented essentially, additional price
signals, through governments.And
I think you would also agree that individual governments really won’t find
interaction in their interests and take action on climate change because it is
a problem, the benefits to an individual jurisdiction are inevitably going to
be less than the cost and therefore international cooperation is required.So, I have two questions.On that as the premise, since you seem
to agree that the United Nations process is probably not the key process going
forward, Question number one:would you agree that the more promising process going forward would be
either the G20, the Finance Ministers of the world, often of course, the heads
of state participate in those meetings, after all the G20 represents
approximately 86 percent of global emissions; or for that matter, the major
economies forum which is almost the same set of countries which accounts for
about 90 percent of the emissions?The first question.

The
second question related to that is; would you agree with me the two key
countries in the world this year who are exceptionally important for progress
in terms of international cooperation, and I’m not referring to China and the
United States, the two major emitters, are rather Korea and Mexico?And the reason I say that is, Korea
this year has the Presidency and is hosting in November, as you know, in Seoul,
the G20, and they set the agenda, and of course, Mexico is going to be hosting
in Cancun in December, team of the U.N. framer on convention on climate
change.So those are my two
questions, if you’re forgive me, I’m going to sit down, I have a very bad back
and I’ve been standing too long right now.

Tom Stewart:Those are two very
interesting – Marc, you want to, we’ll take these apart and we’ll spend a
little time with them, Marc.

Marc Stuart: Yeah, first of all, I
would very much agree with the assessment that the G20 or the MEF’s process is
very likely to be a major pusher in this whole process.Completely agree with that.As I say, you can get five signatures
and get about 60 percent of the world’s emissions, get another 10 to 12 and
you’re up to 85 percent range.Absolutely.It’s far more
efficient and those countries have far more intertwinings of their economies
already.

In
regards to Korea and Mexico; yes, Mexico absolutely.Mexico has a huge responsibility, we’ll here a little bit
more about that later, to basically pick up the ball and sort of show that we
can as a community of nations take this forward.Korea, 100 percent agree.I’m really glad that you said that.I’ve been spending a lot of time in
Korea the last couple of years.They have been very deeply engaged in trying to figure out how they are
going to be engaged in the carbon world.Their emissions profile versus the 1990 cap would be insane for them to
take on just as it would be for China or India or anybody like that.And they’re very, very – trying to come
up with some innovative solutions on how they can engage and part of this as
clearly an industrial country right now, but without the modalities of the old
Kyoto system.And obviously being
head of the OACD is a big part of that, but I think it goes well beyond that
and it’s been really active for the last two years.I think what comes out of there is what’s going to be a
very, very important precedent.

Tom Stewart:So, what we’re saying
is in effect, if I may paraphrase Rob’s statements is of the second question
here that agenda management and agenda setting is an absolutely key element of
this process and perhaps often overlooked.That it’s the people who set the agenda and set the table
who can drive a lot of progress just by that.Peter, do you want to comment on that?And then we’ll turn to you Vinod.

Peter Voser: Yeah, just a sort
comment.I fully agree with that,
but I think we also have to be careful that we are not going at only the
G20.I think it should not be a
magic number.I think it will be
more than the G20.I think it will
be a larger group over time.I
think we have done all the damage with G2, in my opinion, so G7, G8, G6, or G5
whatever we had and now we have G20.but I think we should focus on the right countries, whatever they are
called, but I think we should not limit it because I think today’s countries
which are important may not be entirely those who are important in 20 or 30
years time because the growth of energy will not be the same across the
world.So, that’s a more general
point.

Tom Stewart:And also, if I may
say, if we think about biofuels, the coming online of biofuels may show up in
unusual places because there maybe this perfect biofuel somewhere that you
haven’t imagined that could suddenly make somebody a major player in biofuels
and who is just off the radar screen.Yes ma’am.

Terri
Hinton: Thank you, my name is Terri Hinton and I actually represent Big Think
and some of the other more cutting edge media companies, you know, carrying on
this conversation, trying to elevate culture through that process.And my question is, let’s kind of step
back and pardon me if it’s a little over simplistic, but the sense that I have
in terms of what it takes for true leadership to actually emerge is a level of
absolutely responsibility.And I’m
wondering if, in any of your minds, if there is a sense of a leader or
leadership, whether it’s an organization, a company, an individual, or a
combination of individuals that, you know, has anybody grappled or understood
that and wants to take absolute responsibility for this change that we’re
talking about.And has that
leader, is that leader insight, has it emerged as either an organization or –

Tom Stewart: Sort of the Arch Bishop
Tutu of climate change, if you will.

Terri
Hinton: That’s right, that’s right.You know in an absolutely kind of – the best leaders emerge through that
kind of absolute responsibility, so I’m just wondering if there’s any comments
on that?

Tom Stewart:Any thoughts on
that?

Vinod Khosla: Well, I’ll give it a
try.I think I have to disappoint
you on this one.I don’t think you
will have one leader.I think this
has to be shared because sovereignty will play a big role here and interference
in sovereignty will play a big role, so I think, what I tried to say before, I
think you will need a group of countries, 20 or 25 counties, 15 maybe, who
really drives this.And thus allow
actually a real discussion to actually happen, but as soon as you get into
themes like monitoring of achieving targets, setting targets, etc. you are
going to get really into the country by country issues and I cannot see that
someone can actually lead that discussion through.Leadership is possible to bring a group of 15-20 together
and drive that, but I think I wouldn’t see any country, and that’s why I
mention the G2 in my opinion doesn’t actually help in this whole discussion
taking the absolute lead in this one.So, I would rather –

Tom Stewart:Let me ask you this
because in the information technology industry that you know so well and helped
to shape, there were rock stars, you know Bill Gates and Steve Jobs and I
actually remember when I was at Fortune Magazine we had a cover once that had
Scott McNeely in a Superman costume, right in a super hero costume.So, there were super hero rock stars in
IT.Will there be super hero rock
stars in clean tech?

Peter Voser: I think in a certain
way.Let me be clear.Many of you, I probably sound like a
nut ball with all my forecasts.If
I sat here two years ago and said to you that Citibank could go under, or
Goldman Sachs could be in danger, you would have said I’m a nut ball.What happened?It was getting just a little bit
technical; it was the tail of the probability distribution of what Nassim Taleb
calls it, Black Swan phenomena.I
bring that up for the following reason, I have pieces on energy transformation
that is almost entirely based on black swan’s affinity and I’ve given a number
of talks that I call “The Black Swan Affinity.”The answer is, there will be heroes, but if you look at
Nassim Taleb’s explanation of a black swan, it’s highly improbable, large
impact, and retrospective but not prospective predictability, okay?So, you can’t sit here and say, he’s
going to be the black swan of the Bill Gates of energy.You can’t.But 10 years from now, you will be talking in those terms
almost all large transformation happens through the tail of probably
distribution, if I can get rigorous statically, it never happens out of
extrapolations of the past which is almost all Professor Stavens, almost every
other forecast is based on taking the past and looking at incremental
improvements and disruptive change – he is disagreeing with me. A lot of expert
forecasts are based on past incremental changes – but the model of change will
be different.

Tom Stewart:Let me keep the
conversation going, but I do want to point out that we can’t predict there is
going to be a Bill Gates or a Steve Jobs of energy technology, of clean
technology.We’ll know his name,
or her name, in 10 years, and we can’t predict it now, but in 10 years we will
all say that we knew him then.Right?

Marc Stuart: I think you’re looking at
him.

Vinod Khosla: Can I make another
point?

Tom Stewart:Yeah.I want to – we have just a few more
minutes and I want to make sure – are there any other questions here.We have one more minute.All right, so, a quick point, and then
sir if you have a quick question, we’re going.

Vinod Khosla: You see thousands of
examples of things you should do to be greener.Ninety-nine percent of them are complete nonsense and irrelevant.There’s only two or three things that
matter, and 80 percent of the carbon impact will be because of less than five
technologies 10 years from now.

Tom Stewart:Right.And that will be –

Peter Voser: I think you will have
technology heroes because they have the right technology and they are the
fathers of those, or the mothers.But I think in energy and as I said beforehand, it just drives our lives
so much, you will not get away from very clear sovereign issues and you can’t
have those – absolutely great heroes, but it will always be driven –

Tom Stewart:The great heroes in an
environment a lot of negotiation and some are very technical questions.One – a chance for one quick question
and then a quick response and then we’re going to have to move on.Yes sir.

Tom
Valone: My name, Tom Valone, Integrity Research Institute, Washington D.C.I wanted to address the Climatologist’s
position here which may or may not have been represented successfully in the panel,
and specifically Jim Hanson, who is a colleague of mine, has a voice and should
be heard, specifically about his demand for 80 percent reduction by 2030 in
carbon emissions.This seems like
an impossible task, but the fact is, he’s tackling the coal industry which is
only 20% of our energy consumption.Forty percent is petroleum.My question to Shell is; can Shell make such a commitment of 80 percent
reduction by 2030?There are
technologies across the street, bio-gasoline and so forth, but the other
incentive, market incentive I believe, from our institute’s future
perspectives, and we’ve had three conferences on future energy, by the way, is
that there are technologies that now allow and will allow in just the next
couple of years people to drive cars without gasoline.Not only electric rechargers, but
totally new types of technologies.Will the Shell of the future be able to adapt when their product become
obsolete?

Tom Stewart:That’s a great
question, can the fossil fuel company become the renewable company, and in this
environment, where as many people say, we have to actually think of an absolute
serious reduction of carbon overall.I’ll leave this with you Peter, and then I’m going to wrap it up.Thank you.

Peter
Voser: I
think, as any energy company in the world we’ll have to deliver the energies of
the future and this will be a mixture of fossil driven energy, it will be
renewable energy driven, and whatever you can come up with, but these are most
probably the two.I think by,
that’s our calculations by the mid of this century, you will still be
predominately fossil resource driven – hold on, hold on.These are our calculations.What is our objective is very clear, to
provide the world with energy, but we also are absolutely clear that we have to
meet the increased demands with a much lower cost to the environment and that
drives our innovation, it drives our technology, and it drives our target
setting for the longer term.So,
we are not committing to 80 percent, 50 percent or whatever, these are for the
states to governments to do so and we will do our piece actually to drive it.

Tom Stewart:This is a great, this
is actually a great way to end it, and a great point because I think what we’ve
heard and continue to hear and its part of what has made these negotiations and
these development so complicated, and so difficult over the years is how many
forces are engaged.We have the
force of the development of emerging markets and development of demand and of a
higher quality of life for people who have had a very low quality of life and
that’s – there’s no way to resist that.We have the question of how much Earth can take and is there a cap?Is there some number where we have to
say, sorry it’s not BTU’s per unit of GDP, there’s got to be some absolute
number, we’ve just got to suck it up and bite that bullet.We have the emergence of new
technologies, some of which may be so revolutionary that, as you said, they are
unpredictable now – we have to watch our time.I have to do this.I’m sorry – I hate to cut anybody off because it’s been too good a
discussion.But we have the
emergence of new technologies that could complete change the paradigm
here.And we have the complicating
questions of continuing to live in the house we have while we are building a new
house, and this very complicated policy environment in which we want to create
the circumstances across complex jurisdictions so that what you rightly called
the economic gravity can start having it’s full and eventually internet arm
wrestling metaphor is eventually very dramatic, affect it’s tipping point
effect, which may eventually get to that resolution of that need to reduce –
that opportunity to reduce Co2 by 80%.

I
would like to ask everybody – the panel discussion now has ended, but we’re not
quite done yet.But I would like
everybody here to and on the web, to join me in thanking Marc Stuart, Vinod Khosla, and Peter Voser for what
I think was a really terrific discussion.

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